Tuesday, January 18, 2011

Pakistan's Silver Lining in Rising Exports, Remittances

In addition to significant foreign institutional investments (FII) in Karachi shares last year, the reports of surging remittances by overseas Pakistanis and the nation's growing exports are the only two other pieces of good news amidst an avalance of bad news on the economic front in Pakistan in 2010.

The State Bank of Pakistan has reported that overseas Pakistanis sent home $5.291 billion during July-Dec, 2010, an increase of $761 million or 17 per cent year over year, according to Pakistan's Dawn newspaper.

Remittances of $863 million were sent by overseas Pakistanis last month, up 23.72 per cent or $165 million compared to December, 2009.

Exports in the July-December 2010 touched almost $11 billion – $1.8 billion, or 20.6per cent, higher than last year’s exports in the corresponding period. Meanwhile, imports stood at $19.2 billion, marking a growth of 19.6 per cent, or $3.2 billion, in the first half, according to the Express Tribune.

Pakistani government has been relying heavily on remittances by overseas Pakistanis to fund the massive trade imbalance, which exceeded $8 billion during the first six months of this fiscal.

The increased remittances and rising exports have helped bring down the nation's current account deficit to $504 million for six months, or 0.6 percent of GDP, about 30% lower than the same period in the previous year.

Foreign direct investment (FDI) declined 15.5 per centin the first six months of the current fiscal year to $828.5 million from $968.9 million in the same period last year, according to the Nation quoting figures from the State Bank of Pakistan.

However, in spite of Pakistan's multiple serious crises, the foreign buyers have continued to be relatively sanguine about Pakistan's prospects.

Pakistan's main stock market ended 2010 with a 28 percent annual gain, driven by foreign buying mainly in the energy sector, despite concerns about the country's macroeconomic indicators after summer floods, according to Reuters. Although it was less than half of the 63% gain recorded in 2009, it is still an impressive rise in KSE-100 index when compared favorably with the performance of Mumbai(+17%) and Shanghai(-14.3%) key indexes. Among other BRICs, Brazil is up just 1% for the year, and the dollar-traded Russian RTS index rose 22% in the year, reaching a 16-month closing high of 1,769.57 on Tuesday, while the rouble-based MICEX is also up 22%.

Pakistan's key share index KSE-100 was just over 1000 points at the end of 1999, and it closed at 12022.46 on Dec 31, 2010, sgnificantly outperforming BRIC markets for the decade. Pakistan rupee remained quite stable at 60 rupees to a US dollar until 2008, slipping only recently to a range of 80-85 rupees to a dollar. In spite of the currency decline, Pakistan's KSE-100 stock index surged 55% in 2009 in US dollar terms and 65% in rupee terms. During the same period of 1999-2009, Mumbai Sensex index moved from just over 5000 points to close at 17,464.81.

If you had invested $100 in KSE-100 stocks on Dec. 31, 1999, you'd have over $1000 today, while $100 invested in Mumbai's Sensex stocks would be worth about $400. Investment of $100 in emerging-market stocks in general on Dec. 31, 1999 would get you about $300 today, while $100 invested in the S&P500 would be essentially flat at $100 today.

Here's a video titled "I Am Pakistan":



Related Links:

Haq's Musings

Pakistan's KSE Outperforms BRIC Exchanges in 2010

High Cost of Failure to Aid Flood Victims

Karachi Tops Mumbai in Stock Performance

India and Pakistan Contrasted in 2010

Pakistan's Decade 1999-2009

Musharraf's Economic Legacy

Pakistan Planning Commission

Copper, Gold Deposits Worth $500 Billion at Reko Diq, Pakistan

China's Trade and Investment in South Asia

India's Twin Deficits

Pakistan's Economy 2008-2010

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41 Comments:

Blogger Riaz Haq said...

Pakistan’s current account surplus for July-December 2010 was a provisional $26 million, compared with a deficit of $2.570 billion in the same period last year, the central bank said on Tuesday, according to Dawn newspaper.

In December, the current account stood at a provisional surplus of $601 million, compared with a deficit of $17 million in November, the State Bank of Pakistan said.

The current account deficit for the fiscal year 2009/10 was $3.946 billion, compared with $9.261 billion in fiscal year 2008/09.

January 19, 2011 at 10:09 AM  
Blogger Riaz Haq said...

Pakistan is Striving for Consensus to Spur Ailing Economy, Says Businesswek:

Jan. 20 (Bloomberg) -- Pakistan’s government and the main opposition met today in a bid to hammer out a consensus on ways to contain the nation’s expanding budget deficit and revive an economy battered by terrorism and floods.

Prime Minister Yousuf Raza Gilani’s economic team, led by Finance Minister Abdul Hafeez Shaikh, will begin “substantive and meaningful” negotiations with its chief rival, the Pakistan Muslim League of former prime minister Nawaz Sharif, Ahsan Iqbal, a spokesman for Sharif, said in a phone interview in Islamabad today.
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Any political agreement on a reform program will force the government to cut spending by 30 percent, restructure state- owned money-losing companies, including Pakistan International Airlines Corp. and Pakistan Steels, and set a new price mechanism for power and gas consumers, Iqbal said.

“Politics is driving economic decision making here,” Abid Qayum Sulehri, executive director at the Islamabad-based Sustainable Policy Institute, said in a phone interview. “This will provide Gilani much-needed political cover to take tough economic decisions.”

The government’s economic team met with Sharif’s party, Pakistan Muslim League-Quaid, and coalition partners Muttahida Qaumi Movement and Awami National Party on Jan. 18 to brief them about the state of the economy. Gilani reached out to the opposition after Sharif demanded the premier implement a 10- point economic agenda within six weeks and move against corrupt officials or face a campaign for his ouster.

The Karachi Stock Exchange’s 100 Index, which advanced 28 percent last year, fell 1.3 percent to 12,411.87 today in Karachi. The rupee traded at 85.73 against the dollar, after falling 1.65 percent last year.

“I’m not too optimistic that this political give-and-take will change things substantially on the ground,” said Asif Ali Qureshi, head of research at Invisor Securities Ltd. in Karachi. “Investors usually get nervous when foreign exchange reserves start shrinking and the currency comes under pressure. That hasn’t happened so far this year.”

Partner Returns

Gilani on Jan. 7 succeeded in winning back the support of his partner, the MQM, after reversing the fuel-price rise. His Pakistan Peoples Party lost its majority Jan. 2 when the MQM had quit the coalition. President Asif Ali Zardari’s grip on power was further undermined by the Jan. 4 assassination of a key aide, the governor of the Punjab province.
The petrol-price rollback, which runs the risk of a wider budget deficit, was criticized by U.S. Secretary of State Hillary Clinton, who urged Pakistan not to “reverse progress.”
“We have moved forward in a concrete way,” Ishaq Dar, a former finance minister and a key aide to Sharif, told reporters after the meeting. “You’ll see things moving in the next few weeks.”
Maria Kuusisto, an analyst at consultant Eurasia Group, said in a Jan. 14 telephone interview from London, that Pakistan’s budget shortfall may touch 8 percent of gross domestic product, or 1.3 trillion rupees ($15.15 billion) in the year through June from 6.3 percent in the previous year.
The central bank governor last month blamed government borrowing for price pressures and said raising interest rates may impede investments and undermine economic growth.
The government borrowed 401 billion rupees from the central bank between July 1 and Jan. 8, more than double the amount it borrowed in the same period last year, according to data from the State Bank of Pakistan.
“Pakistan is operating without any fiscal order,” Sakib Sherani, an economic adviser in Pakistan’s finance ministry from July 2009 to December 2010, said in an interview. “The fiscal mismanagement may produce the biggest budget deficit in Pakistan’s history in absolute terms.”

January 20, 2011 at 9:05 AM  
Blogger Riaz Haq said...

Pakistan's foreign exchange reserves continued to rise through Jan 15, 2011, according to report in Express Tribune:

KARACHI: Foreign exchange reserves rose to a record $17.28 billion in the week ended January 15, up from $17.09 billion in the previous week, the central bank said on Thursday.

Reserves held by the State Bank of Pakistan (SBP) rose to $13.66 billion from $13.44 billion, while those held by commercial banks fell to $3.62 billion from $3.65 billion, said Syed Wasimuddin, chief spokesman for the central bank.

“The main reason for the increase in foreign exchange reserves is the rise in remittances received from overseas Pakistanis,” said Wasimuddin. According to official data, remittances rose 17 per cent to $5.3 billion in the first six months (July-December) of fiscal year 2010-11.

Foreign exchange reserves previously hit a record high in the week ended January 1 as the country received more than $633 million from the US for providing military and logistical support in the fight against terror.

In May last year, the government received $1.13 billion – the fifth tranche of an $11.3 billion International Monetary Fund bailout programme.

In the currency market, the rupee ended weaker at 85.73/80 to the dollar, compared with Wednesday’s close of 85.68/73 because of rising international oil prices.

In the money market, overnight rates fell to 11 per cent, compared with Wednesday’s close of between 12 and 12.50 per cent, because of increased liquidity in the interbank market. Dealers said there are scheduled outflows of Rs53 billion ($613 million) on Friday.

January 20, 2011 at 1:57 PM  
Blogger Riaz Haq said...

Here's a story in the Economist on economic mismagement in Pakistan:

ON JANUARY 3rd Pakistan’s central bank began printing rupee notes carrying the signature of Shahid Kardar, who was appointed governor of the State Bank of Pakistan in September. Unfortunately inflation has robbed money of over 15% of its value in the past year, and no let-up is in sight for the new notes. It is the most visible sign of an economy slouching towards another financial crisis.

At the start of the year the government raised petrol prices, prompting the Muttahida Qaumi Movement (MQM) to quit the coalition government led by the Pakistan People’s Party (PPP). It left the PPP “with a choice between saving the government and saving the economy,” as Maleeha Lodhi, Pakistan’s former ambassador to the United States and Britain, put it in the News, a Pakistani daily.

On January 6th the PPP made its choice, reversing the price rise. The decision has rescued the government but also robbed the exchequer of 5 billion rupees ($58m) a month. By the end of the fiscal year in June, the government’s deficit could reach 6.5% of GDP, according to Sayem Ali of Standard Chartered bank, or even 8% if oil prices continue to rise, according to Mohsin Khan of the Peterson Institute, in Washington, DC.

Pakistan’s budget has a lot to bear. The World Bank reckons that recovering from the summer’s devastating floods, which damaged over 1.6m homes, will cost up to $10.8 billion. To date, aid has been modest. Donors have pledged just $2.1 billion, or $11 per person, compared with $363 per person promised to Haiti after its earthquake —a slightly unfair comparison perhaps.

Yet Pakistan’s fiscal troubles are antediluvian. It is one of the most lightly taxed countries in the world. Fewer than a quarter of the country’s firms declare any taxable revenues, and only 11 out of every 1,000 of its citizens pay tax on their incomes, according to the World Bank. As a result, tax revenues amount to a mere 10% of Pakistan’s GDP.

The government had hoped to raise that ratio by broadening its sales tax, which is riddled with exemptions. Yet it lacked the heart to defy lobbies which slip through the threadbare tax net. They include exporters who escape tax on their domestic sales, as well as retailers and wholesalers who elude tax altogether. The proposed reforms also proved unpopular with the broader public, who resent paying anything to a government that gives them so little in return.

The government’s failure has jeopardised its agreement with the IMF, which is withholding the remaining $3.5 billion of the bail-out funds it offered back in 2008. At that time, the rupee was tumbling and Pakistan’s foreign-exchange reserves barely covered three weeks’ worth of imports. If the country is not yet in similar trouble, it can thank Pakistani folk abroad, whose remittances surged by 16.8% in the second half of 2010, compared with a year earlier (see chart). This is one reason why the rupee has not sunk further, and why the central bank’s reserves still cover six months’ worth of imports.

Yet foreign investment has slowed to a trickle, and higher commodity prices will add to the country’s import bill. Meanwhile, Pakistan’s foreign debt must be serviced. The finance minister is in a pickle. If Pakistanis lose heart, too, they may quit the currency, scrambling for dollars instead. Should that happen, Pakistan’s reserves will quickly vanish. And here is the big difference between 2008 and today: Pakistan has already had its IMF rescue.

January 20, 2011 at 10:38 PM  
Blogger Riaz Haq said...

Pakistan's agriculture sector remained robust in spite of heavy flooding last year, according to Dawn:

ENCOURAGING news from export front, mainly about wheat, dominated trading on the Karachi wholesale markets last week where prices showed tendency to rise as some exporters covered their forward sales to meet their shipment deadlines.

A major breakthrough on the wheat front was widely welcomed by commercial traders and exporters who hoped the exportable surplus would add to foreign exchange earnings, market sources said.

But leaders of flour mills association opposed the official move fearing rise in flour prices in coming weeks. But the government was seized with the problem of disposing of the surplus of over a million tons well before the arrival of new crop, they said.

“It is a good beginning on wheat export front,” said a commercial exporter. He said the “profit-margin is not attractive but new export outlets are being explored to dispose of future surplus.”

With a loaded consignment of 27,000 tons of wheat for some African destination, a loader has already left, while another Bangladesh ship is on the port loading a consignment of 20,000 tons for Chittagong, exporters said.

But the news from sugar front was not encouraging as price tussle between growers and mill owners continued after the later reduced the cane procurement price from Rs230 per maund to Rs210 without any reason. The growers in some areas had stopped supply of sugarcane to mills.

However, sugar prices in retail and wholesale markets rose further high despite mills’ claim that supplies of new crop to commercial dealers are being made
regularly and prices should remain stable around previous levels.

Much of the physical activity, meanwhile, remained confined to some essential counters where floor brokers reported pressure on supplies.

Arrivals from upcountry markets remained steady, which, in turn, did not allow speculative increase in prices and most of the increases were orderly. Dealers said changes in prices were mostly orderly and did not reflect speculative rise on any counter amid two-way activity and higher ready off-take.

The industrial sector showed two-way active trading as some commodities showed rise under the lead of guar seeds and cotton-based items because of a record rise in cotton prices owing to a short crop, they said.

On essentials’ counters, including wheat and sugar, prices remained stable despite higher demands followed by reports of steady arrivals from upcountry market.

Sugar prices remained stable early but rose later, although dealers reported a fairly large business at the unchanged rates in an apparent effort to sell it later at higher rates, they said.

Rice exporters said the recent increase in global prices was expected to significantly add to export earnings of the private sector exporters. They said talks were going on with some importers and hopes of some deals were bright during the next couple of days.

On the other hand, cotton prices showed wild either way movements amid alternate bouts of buying and selling but late in the week a sharp decline in New York cotton futures pushed them lower around Rs9,000 per muand, which spinners said were still higher than their export parity level for textiles.

January 22, 2011 at 5:41 PM  
Blogger Riaz Haq said...

As food prices and farm incomes rise, Pakistan is seeing record tractor sales in rural areas, according to The Nation newspaper:

LAHORE - Millat Tractors Limited set a new record of highest ever sales of 41,500 tractors in the calendar year 2010, improving upon its previous year sales of 37,537 tractors.
Out of these 41500 tractors, a record 5000 tractors have been produced and sold in the month of Dec, 2010.
This has been outcome of Company’s commitment to provide maximum number of tractors to increase farm productivity and accelerate the pace of farm mechanization in the country, according to a Press release.
Millat Tractors has further taken steps to increase productivity and quality of tractors in order to provide timely delivery to its customer in future.


Here's another report from Dawn on increasing rural sales of bikes:

Motorcycle and car sales enjoy over 50 per cent and 40-45 per cent market share in rural areas as country’s 60-65 per population lives in the rural areas.

After witnessing decline in August, many car and bike makers had registered recovery in sales in September.

Total car sales in July-September 2010 (including Suzuki Bolan) rose by 12 per cent to 30,030 units as compared to 26,812 units in the same period of 2009.

In the category of 1,300cc and above, Honda Civic and City sales in September 2010 rose to 548 and 832 units as compared to
492 and 688 units in August 2010. However, sale of these cars had plunged in August 2010 as compared to July 2010.

In July-September 2010, sales of Civic and City had risen to 1,558 and 2,274 units from 1,308 and 1,955 units in the same period of 2009.

Toyota Corolla sales slightly went up to 3,070 units in September 2010 as compared to 2,901 units in August 2010 while its July 2010 sales were 4,400 units.Overall Toyota sales in July-September 2010 increased to 10,371 units as compared to 8,951 units. Suzuki Swift sales rose to 252 units in September 2010 as compared to 226 units in August 2010.

In 1,000cc segment, a total of 1,106 units of Suzuki Cultus were sold in September 2010 as compared to 1,050 units in August 2010 while Alto sales slightly fell to 1,047 in September 2010 from 1,141 units in August 2010. The overall sales of Cultus and Alto in July-September swelled to 2,860 and 2,819 units from 2,852 and 2,365 units in the corresponding period of 2009...

January 22, 2011 at 6:00 PM  
Blogger Riaz Haq said...

Pakistan suffered a decline in FDI inflow in July-Dec 2010 of 15.5 per cent to $828.5 million from $968.9 million in the same period last year, according to The Nation newspaper.

Increased exports and remittances still helped Pakistan achieve a small current account surplus of $26 million in July-Dec 2010 period, according to Dawn News.

Pakistan wasn't the only developing nation in South Asia to see FDI decline. India suffered 31.5% decline in FDI in 2010, according to UNCTAD.

FDI inflow in India declined from $34.6 billion in 2009 to $23.7 billion in 2010.

With decline in FDI, India is now running a huge current account deficit of over 3.0% of its GDP for July-Dec, 2010, according to Trading Economics.

January 26, 2011 at 10:45 PM  
Blogger Riaz Haq said...

Swedish trade mininster says Swdedes want to expand investments in Pakistan, according to news reports:

Swedish Minister for Trade Ms. Ewa Bjorling said on Wednesday that a good number of Swedish companies were already working in Pakistan and more companies were interested to start business ventures.

She said in a meeting here with Islamabad Chamber of Commerce and Industry (ICCI) for the promotion of two-way trade between Pakistan and Sweden.

She said that she had meetings with Prime Minister of Pakistan and other government officials and discussed the possibilities of more cooperation between the countries.

She said that Tetra Pack has presence in Pakistan for the last several years, and it has set up a new plant in Pakistan. She said that Swedish Trade Council is responsible for trade between both the countries and hoped for great business prospects in the fields of common interest.

Fredrik Fexe, Vice President of Export Radet, a Swedish Trade Council said that Pakistan is large consumer market. He identified telecom, energy, environmental technology, water purification, waste management, automobiles, healthcare, and supply of construction equipment for having trading, investments and joint ventures with the Pakistani companies.

Charlotte Kalin, Vice President of the Stockholm Chamber of Commerce and Industry informed that three Swedish delegations visited Pakistan last year and current delegation was quite optimistic of good business prospects here.

Mahfooz Elahi, ICCI President, thanked the Trade Minister for bringing a trade delegation for building trade and investment relations with Pakistani companies.

He said that Swedish companies including Panasian, Volvo, Ericson, Sabba, Tatra Pak, Skanska, Wah Nobel, H&M, Ikea and Atlas Packages Limited are operating successfully in Pakistan and said that more Swedish should invest in hydro power projects, dams, tunnels, infrastructure development, food and beverages and dairy and milk products.

Mahfooz Elahi said that perception about good image of Pakistan is needed to be improved to encourage foreign investor to invest in the country.

January 31, 2011 at 11:45 AM  
Blogger Riaz Haq said...

Pakistan's exports to China rose 37% in 2010, according to Dawn News:

BEIJING: From January to December 2010, Pakistan’s exports to China increased by nearly US $ 500 million and their overall growth rate was 37.4 per cent.

According to the figures released by China Customs, the total Pakistani exports to China last year were US $ 1.7 billion compared to US $ 1.2 billion in 2009.

Since 2006, Pakistani exports to China has been gradually climbing. The total volume of Pakistan-China trade rose by US $ 2 billion to US $ 8.7 billion approximately.

Last year, textiles, ores and mineral products, leather, chemicals and plastics, sports goods, iron and steel, surgical instruments showed the trend of faster growth rates.

In 2010, Pakistan’s imports from China also increased by US $ 1.4 billion and the total volume of imports from China stood at US $ 6.9 billion. The trade deficit right now for Pakistan is US $ 5.2 billion.

“The two governments have agreed on a series of measures to reduce the trade deficit” said Ambassador Masood Khan on Friday adding that in this regard, China would be sending purchase missions to Pakistan to identify suitable Pakistani products for Chinese markets.

He pointed out that Pakistani traders and businessmen will be attending major trade exhibitions in Kunming, Guangzhou, Xi’an, Urumqi, Kashghar, Dalian, and Beijing.

Trade seminars would also be held to create greater space for Pakistani products in China.

Meanwhile, Pakistan has requested assistance from China in vocational and technical training in the areas of value added textiles, gems and jewelry, ceramics, surgical instruments, leather and light engineering.

At the last meeting of the Free Trade Commission (FTC), China agreed to consider the proposal and invite Pakistan to identify specific training needs in these areas.

Pakistan has also requested China to give unilateral tariff concessions to 268 Pakistani product lines.

Pakistan is the second largest trading partner of China in South Asia.

February 7, 2011 at 4:23 PM  
Blogger Riaz Haq said...

Here's an interesting assessment of Pakistan's economy in 2H-2010:

...“The country’s exports, money sent by overseas Pakistanis, balance-of-payments position and foreign exchange reserves have reflected an encouraging growth during July-December FY11, showing strong signs of improvement in the economy,” Saad-bin-Naseer, CEO of Pearl Capital, told Central Asia Online January 28. Pakistan’s exports were $10.97 billion, an increase of US $1.88 billion, in the first six months of FY11.

That 21% increase was a very positive sign for the growth of export-oriented industry and the national economy, he said.

In FY11 exports could cross the $22 billion mark for the first time because of a significant increase in the value of Pakistani products on world markets, Naseer added.

“The textile industry had taken the lead by fetching $1.28 billion in additional foreign exchange through exports,” Anisul Haq, secretary of All Pakistan Textile Mills, told Central Asia Online.“The textile industry had taken the lead by fetching $1.28 billion in additional foreign exchange through exports,” Anisul Haq, secretary of All Pakistan Textile Mills, told Central Asia Online by telephone from Lahore. “From July-December FY11 textile exports increased to $6.28 billion” compared to 2010 figures.

Total annual textile exports could exceed $13 billion for the first time, he added. In 2009-10, they totalled $10.5 billion.
“The textile industry had taken the lead by fetching $1.28 billion in additional foreign exchange through exports,” Anisul Haq, secretary of All Pakistan Textile Mills, told Central Asia Online.
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Another pillar of the economy is remittances from overseas Pakistanis. The money they sent home increased by $780m in the first half of FY11, to $5.3 billion, Haq said.

“We hope the country would receive $11 billion from overseas Pakistanis in 2010-11 with major increase in inflows from Pakistanis staying in Arab countries and other western countries,” Haq said.

Foreign aid from institutions and countries, not just individuals, helped. The disbursement of $633m in coalition support and the extension that the IMF gave the government for imposing the Reformed General Sales Tax (RGST) helped improve some of the major economic indicators, Naseer said.

The picture did much to bolster Pakistan’s balance sheet, which has had its ups and downs. Pakistan recorded a current account surplus in the first six months of the fiscal year, which enabled growth in foreign exchange reserves and stabilised the dollar-rupee exchange rate, Pearl Capital’s Naseer added.

In 2009-10, the country incurred a $2.5 billion current account deficit from July-December, but for the same period in 2010-11 it enjoyed a surplus of $26m – a dazzling switch from red ink to black, he said.

The robust performance of exports and remittances enabled Pakistan to accrue a record $17.3 billion in foreign exchange reserves by January 21, he said.

Investor confidence has grown in response to these positive indicators. The stock market capitalisation grew to $36 billion in January 2011 from $32 billion in October 2010, he said, adding that such growth would encourage foreign and local investment.
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warned.

Islamabad, which still hasn’t imposed the RGST the IMF wants, doesn’t collect enough taxes, Khan said. It levies only about 9% of GDP against the required international standard of a minimum 15% tax-to-GDP ratio, Khan said.

The government must implement tax reform, reduce reliance on borrowing from the IMF and generate its own resources to enhance tax revenues and to bolster economic growth, he added.

Serious efforts to solve chronic gas and power shortages are also imperative, he said.

February 11, 2011 at 5:35 PM  
Blogger Riaz Haq said...

With rising cotton and yarn prices, Pakistan has the potential to export $50 billion in textiles, according to a report in Gulf Today:

KARACHI: Pakistan has a potential of at least $50 billion in value-added textile exports if human resource in this sector is fully developed, said Textile Commissioner Muhammad Idrees.

Addressing the closing ceremony of 9th round of apparel manufacturing and management training programme at the Readymade Garments Technical Training Institute, the official said that the present volume of exports was not at all satisfactory.

The stakeholders could easily double this volume by improving skills of workers and through compliance with the standards of buyers, he added.

The skills development programme comprised one-month training, which covered cutting, sewing, production management, industrial engineering and quality control. Experts and consultants from Technopak, a world renowned consultancy firm, were hired for the training.

Thirty-one master trainers or middle management professionals from Artistic Milliners, Naz Textiles, Rajby Industries and Selimpex International and Soorty Enterprises attended the ninth round of training project.

The training project has so far been successfully implemented in 30 factories in Sindh and has trained 279 master trainers/middle management professionals and 3,693 workers.

The project delivered complete training system, course curriculum, manuals and consulting guidelines to the factories. Training manuals are also translated into Urdu language to transfer appropriate knowledge and skills to workers.

Pakistan’s textile sector is optimistic about meeting the annual export target, as high cotton prices in domestic and international markets have caused an increase in prices of value-added textile products, industry people say.

The government had fixed the textile export target at $14 billion for the current fiscal year. Members of the textile sector are of the view that achieving the target is possible, as exports of highly value-added items such as knitwear and garments have increased in terms of value.

Statistics released by the Federal Bureau of Statistics (FBS) show the textile sector has performed well in the first half (July to December) of the current fiscal year, as its exports increased by 25.79 per cent as compared to the corresponding period of the previous year.

The industry, however, believes they would need to import up to five million bales of cotton because the 11 million bales produced so far in the country will not meet the requirements as some of the crop has been destroyed by flood.

The industrialists also expressed reservations about gas shortage in the country that has already caused a huge loss to the industry, particularly in Punjab. All Pakistan Textile Processing Mills Association Chairman Maqsood Ahmad Butt stressed that cotton prices reached Rs13,000 per maund (37.324 kg) and the sector may face a shortage of cotton in June if India did not lift the ban on exports.

“There is a possibility that exports will cross $14 billion target if cotton shortages are met and gas supply is restored,” he opined.

February 14, 2011 at 10:28 PM  
Blogger Riaz Haq said...

News about 2010-2011 budgets in South Asia:

The BBC is reporting that "the budget deficit has reduced to 5.1% of GDP this fiscal year, down from more than 6%. The plan is to cut this to 4.6% next year".

Pakistan's budget deficit for first six months of 2010-2011 stood at 2.9%, up from 2.7% last year, according to CNBC and Reuters.

KARACHI, Feb 28 (Reuters) - Pakistan's budget deficit for the first six months of the 2010/11 fiscal year (July-June) was 2.9 percent of gross domestic product, the Finance Ministry said on its Web site (www.finance.gov.pk) on Monday. This compared with a deficit of 2.7 percent in the same period last year. In the October-December quarter, the deficit eased to 1.3 percent from 1.6 percent in the preceding quarter. Analysts said the lower second-quarter deficit was largely due to payments by the United States for logistical support provided by Pakistan in the war against Islamist militants. In November 2010, Pakistan agreed with the International Monetary Fund (IMF) that it would keep the country's budget deficit at 4.7 percent for the 2010/11 fiscal year. However, analysts agree Pakistan will likely overshoot this figure. Some forecast the deficit to be around 8 percent, higher than the central bank's prediction of between 6.0 and 6.5 percent, if fiscal reforms are not implemented. The original target of 4 percent was revised following the devastating summer floods, which caused around $10 billion in damages.

February 28, 2011 at 9:16 AM  
Blogger Riaz Haq said...

The Obama administration has proposed $3.1 billion in the 2012 budget allocation for Pakistan, according to The Express Tribune:

The administration’s spending for Pakistan is broken into two parts, the “enduring core part” – meaning long-term assistance programs – and the Overseas Contingency Operations (OCO), an administration official said at a briefing on President Barack Obama’s budget proposals for the fiscal year 2012, beginning October 1, 2011.

As part of the long-term economic and security assistance, President Obama is seeking $1.9 billion in the year 2012. The amount will also cover the cost of American aid operations and diplomatic presence.

Of the $1.9 billion, around $1.5 billion is annual money to be allocated under the Kerry-Lugar-Berman five-year aid measure.

It also includes $350 million in foreign military financing programs, which is part of the five-year agreement between the two countries.

Under the Kerry-Lugar-Berman initiative, the US funds a number of programs including development of democracy and wide-ranging infrastructure projects to assist Pakistan’s economic progress.

On the OCO side of the budget, the administration has proposed $1.2 billion, out of which $146 million is for operational expenditure.

Under the OCO, $1.1 billion is to be devoted to the Pakistan Counterinsurgency Capability Fund (PCCF). The PCCF seeks to train Pakistani forces for a more effective fight against insurgents along the country’s western border with Afghanistan.

March 1, 2011 at 9:24 AM  
Blogger Riaz Haq said...

Thailand alone (population 66 million) exports (about $188b), more than Afghanistan, Egypt, Jordan, Lebanon, Mauritania, Morocco, Pakistan, Syria and Tunisia (combined population 345 million) altogether. The countries of the Middle East barely trade among each other, let along with the economic powerhouses of Asia, according to the Wall Street Journal.

March 4, 2011 at 7:01 PM  
Blogger Riaz Haq said...

Here's a summary of Pakistan Planning Commission report Part 1 on economy:


Real Sector

In the post flood scenario, Pakistan economy is likely to manage a growth between 2.5 to 3% this year. Agriculture sector received major blow from the flood and two major Rabi crops, cotton and rice missed the production target by 17.5% and 42%, respectively. Sugarcane and Maize managed to achieve the target while Wheat, the major Kharif crop has achieved 97.34% of the sowing target by the end of January 2011.
Large scale manufacturing (LSM) sector posted a negative growth of 1.77% during July-December 2010 compared to the same period last year. Growth of Textile, Food, Petroleum products, and fertilizers was negative during the period, while production of Pharmaceuticals, Chemicals, Automobiles, Electronics and Engineering items grew positively. The decline in LSM can be attributed to the loss of production due to high oil prices and energy shortages. In the coming months, there is optimism that with the start of crushing season of sugarcane and better supply of gas, production activity will be revived.

Inflation

Inflation rate based on Consumer Price Index (CPI), Sensitive Price Index (SPI) & Wholesale Price Index (WPI) for July to January 2010-11 have increased over the same period of 2009-10 by 14.55%, 19.20% and 22.37%, respectively. Food inflation has increased to 18.8% for July - Jan. 2011, which was 10.9% in the corresponding period last year, while Non-Food inflation has increased from 10.7% to 11.0% in July-Jan. 2011. The current inflationary trend in the food group is the continuation of the domestic and international surge in prices of agricultural products and losses suffered due to floods. Other factors contributing to rising inflationary trend are higher government borrowings through monetization to meet expenditures on security and flood affectees, currency depreciation, high mark-up rates, and higher adjustments in utility prices.

Monetary Developments

The broad money aggregate (M2) increased by 8.18% during July-mid February 2011. Overall Credit to government sector for July to January 2011 increased by 12.5%, while State Bank of Pakistan's credit to government sector grew by 9.53% for the same period.
Credit extended to the private sector also showed a positive growth of 7.37% for the period of July-3m. 2011, which was a positive development for the revival of the economy.

Fiscal Position

Federal Board of Revenue (FBR) has collected tax revenue of Rs. 770 billion during July-Jan. of current financial year (2010-11) showing an increase of 10.8% as compared with the same period last year. Government has set the target of Rs. 1667 billion for the fiscal year 2010-11. First seven months tax collection accounts for about 46.2% of the target, which is an alarming signal for the tax authorities. In this scenario, prudent tax collection policy and Reformed General Sales Tax (RGST) is of utmost importance. According to the World Bank estimates, implementation of the RGST is likely to increase Pakistan's tax-to-GDP ratio to around 11 percent by fiscal year 2013. The Tax to GDP ratio is currently around 9% which calls for immediate measures, like the reformed GST, to broaden the tax base.

March 10, 2011 at 10:07 AM  
Blogger Riaz Haq said...

Here's a summary of Pakistan Planning Commission report Part 2 on economy:


Balance of Payments

Country's current account deficit has declined by 97.3% during July-January, 2011 over the corresponding period last year. The current account deficit during this period stood at $81 million as compared to $3,052 million during the same period last year. The ease in the current account deficit is owed largely to the relatively high export growth and workers remittances during th's period. The export of goods showed impressive improvement of 20.3% while the imports also grew by 10.4% during the period under review.
Workers' remittances surged by 17.7% during July-Jan. 2011 over the same period last year and reached $6117.97 million. In the same period last year, $5,197 million were sent home by the overseas Pakistanis. The growth in remittances can be attributed to the joint initiative of the SBP, Finance and Overseas Pakistanis Ministries launching "Pakistan Remittance Initiative (PRI)". The initiative has started materializing and hence remittances through formal channels have been
consistently showing considerable growth.
The net inflow of foreign investment in Pakistan fell by 14.2% during July-Jan. 2011 over the corresponding period last year. The economy also witnessed a downward slide in foreign direct investment (FDI) by 16% but certain sectors witnessed significant improvement in inflow of FDI
like; Sugar, Pharmaceuticals, Cement, Cosmetics, Ceramics and Information Technology. The deteriorated law and order situation, fragile political climate and the prolonged war on terror have been deterrents to new investment ventures in the country

New Developments and Reforms

According the recently released labor force survey, the overall labor force participation rate has increased from 32.8% in 2008-09 to 32.98% in 2009-10, while female participation rate has increased from 14.9% to 15.45%, which is an encouraging sign for the Pakistan economy. Unemployment rate has been increased marginally from 5.46% in 2008-09 to 5.55% in 2009-10.
The federal government has imposed income tax (withholding tax) at the rate of 3.5 per cent on farm produce dealers from January 1, 2011. The Federal Board of Revenue (FBR) has issued a notification in this regard, directing the local and provincial governments to collect the tax.
The amended Bill for the autonomy of State Bank of Pakistan is in the process of approval. The amendment aims to weaken the power of the federal government to borrow from the SBP through specific statutory measures that will make borrowing extremely complex. According to the new legislation government borrowings from the central bank will be limited to the 10% of the previous year's revenue.

March 10, 2011 at 10:09 AM  
Blogger Riaz Haq said...

Here's piece by Michael O'Hanlon of Brookings recommending closer US ties with Pakistan, including free trade deal and nuclear cooperation similar to US-India nuclear deal:

Under these circumstances, part of the right policy is to keep doing more of what the Obama administration has been doing with Pakistan -- building trust, as with last month's strategic dialogue in Washington; increasing aid incrementally, as with the new five-year $2 billion aid package announced during that dialogue; and coordinating militarily across the border region. But Obama also needs to think bigger.

First, he needs to make clear America's commitment to South Asia, to wean Pakistan away from its current hedging strategy. Obama has frequently used general language to try to reassure listeners in the region that there will be no precipitous U.S. withdrawal next summer. But few fully believe him. Hearing stories like Bob Woodward's accounts of how the vice president and White House advisors have generally opposed a robust counterinsurgency strategy in favor of a counterterrorism-oriented operation with far fewer U.S. troops, they worry that next summer's withdrawal will be fast. Obama needs to explain that he will not revert to such a minimalist "Plan B" approach under any imaginable circumstances. More appropriate would be a "Plan A-minus" that involves a gradual NATO troop drawdown as Afghan forces grow in number and capability, without necessarily first stabilizing the entire south and east, should the current strategy not turn around the violence by next summer or so. This would represent a modification to the current plan rather than a radical departure. The president can find a way to signal that this is in fact his own thinking, sooner rather than later -- ideally before the year is out.

Second, Obama should offer Islamabad a much more expansive U.S.-Pakistani relationship if it helps win this war. Two major incentives would have particular appeal to Pakistan. One is a civilian nuclear energy deal like that being provided to India; Pakistan's progress on export controls in the wake of the A.Q. Khan debacle has been good enough so far to allow a provisional approval of such a deal if other things fall into place as well. Second is a free trade accord. Struggling economically, Pakistan needs such a shot in the arm, and a trade deal could arguably do even more than aid at this point.

But the key point is this: Pakistan should be told that these deals will only be possible if the United States and its allies prevail in Afghanistan. Small gestures of greater helpfulness are not adequate; bottom-line results are what count and what are needed. If Afghanistan turns around in a year or two, the deals can be set in motion and implemented over a longer period that will allow the United States to continually monitor subsequent Pakistani cooperation in the war.

It may seem harsh to Pakistan that America would put things in such stark terms -- but in fact, it is not realistic that any U.S. president or Congress would carry out such deals if the United States loses the war in Afghanistan partly due to Pakistani perfidy. As such, these terms are really just common sense, and they are based on political realism about America's domestic politics as well as its strategic interests.

America's current strategy for the war in Afghanistan is much improved. But it is not yet sound enough to point clearly toward victory. The most crucial problem is the role of Pakistan in the war, and so far, the Obama administration is not thinking creatively enough about how to fix it.

March 25, 2011 at 6:41 PM  
Blogger Riaz Haq said...

Here's State Bank of Pakistan (SBP) assessment of the effect of Arab revolt and Japan quake-tsunami on Pakistan's economy:

KARACHI: The State Bank of Pakistan (SBP) said on Saturday that the global trade shock due to the conflict in Arab world and earthquake and tsunami in Japan remained beneficial for the country’s economy.

In its Monetary Policy Statement for the next two months, SBP said that the scenario helped the country to fetch better export price in international markets.

SBP said that there remains growing uncertainty in the global economic environment. The popular uprising in the Middle East and North Africa (MENA) region and unprecedented damage to the Japanese economy because of an historic earthquake and tsunami have shaken the global economy, which has yet to fully recover from the repercussions of the financial and economic crisis of advanced economies, it said.

One consequence of these developments has been high international commodity prices, especially of oil, it added.

“So far, the terms of trade shock have been favorable for Pakistan’s economy. More than 90 percent of the incremental increase in export earnings during July ñ February, FY11 over the corresponding period of last year has been due to high international prices of Pakistan’s exports.”

SBP said that the contribution of high import prices, particularly of oil, to the import bill has been relatively low, but is substantial and rising.

SBP further said that the turmoil in the Arab region may also influence the flow of remittances to Pakistan. “However, assuming that the inflow of remittances continue its current trend for the remaining months of FY11, there are no immediate risks to the external current account balance,” SBP added.

The financial account inflows such as foreign direct investment and portfolio investments have remained fairly modest during July ñ February FY11, almost half the level of inflows seen in the corresponding period of the last year, which was also small compared to historical levels.

SBP said that the overall balance of payment position appears to be strong at the moment with a gradual build-up of foreign exchange reserves and a stable foreign exchange market. “However, given the uncertainty with respect to foreign inflows, the developments in the external sector will need to be monitored closely in the coming months.”

March 27, 2011 at 10:04 PM  
Blogger Riaz Haq said...

Here are some excepts from an Op Ed by Pak industrialist Yousuf Shirazi of Atlas Group:


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Pakistan’s mineral resources – oil, gas and copper, much less gold – remain unexploited. Whatever the case, Pakistan is basically an agricultural economy. Before Partition, the area now comprising Pakistan had fed the entire India. Even now when the floods have affected the crops, Pakistan is exporting rice and wheat. And the cotton prices are so high that, together with wheat and rice prices – reinforced by global revival – it has fed the entire rural area, with unusual liquidity, so as to give a fillip to consumer demand seldom seen before!

Pakistan’s major exports consist of textile, rice, leather goods, sports goods, chemicals and carpets. More than 50 per cent of its export earnings still come from textiles – now yarn being in the forefront. Only if Pakistan focuses on agriculture in the right way can it replace the import with export economy. The current year is expected to record export of over $25 billion but, on the other hand, imports are also expected to exceed exports – $35 billion at the close of the year. The deficit finance – July-December FY10, $6.895 billion – is not any pride whatsoever. The existing situation can be remedied through exploration of mines and optimising agricultural growth and export
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In a situation like this, perhaps, the only course remains increased reliance on aid, loans and credit, which, in essence, has been worsening the economy. These loans and credits, in fact, help the economies of the developed world more than the economies of the developing countries. This is achieved through massive import – of machinery, raw materials, if not food – the PL480 of the USA – depriving the recipient countries of local investment, production and export. This has been leading to unemployment and poverty from which the developing countries traditionally suffer. The solution for the developing countries lies in reliance on education, healthcare and socio-economic infrastructure – more so in Pakistan.
---------
Socio-politico-economic harmony will depend, among others, on development finance through development finance institutions like PICIC and IDBP that provided long-term development finance. Now there is none. The commercial banks are doing it, but not adequately enough. It is not the job of commercial banks either. However, they are not only providing development finance of whatever worth, but all sorts of non-commercial banking – investment banking, leasing, to say nothing of asset management, and mutual funds. Jack of all trades, master of none. It is all at the cost of commercial banking, per se. The regulators may take note of it. The sooner this anomaly is rectified the better for the export orientation of the economy, and for the socio-politico-economic development of the country as a whole.

An immediately available solution is facilitating remittances, now roughly $1 billion per month and taxing the 57 per cent underground economy, under-invoicing and tax evasion, if not smuggling. The World Bank’s recent report claims this deprives the exchequer of over $500 billion annually. This will be equal to, if not, more than the aid, loans and credits which are always given at a high cost to the economy. Taxing the underground economy will reinforce localisation of investment, production and exports – glocalisation, creating employment opportunities, providing the roti, kapra aur makaan (bread, clothing and shelter) promised to the masses of people, not globalisation, which serves global interests. It will enable also much sought after access to the developed world based on outright merit.

April 2, 2011 at 4:57 PM  
Blogger Riaz Haq said...

The $20m grant by USAID for Pakistani version of Sesame Street is part of $1.5 billion a year Kerry-Lugar Bill passed last year. Most of the $1.5 billion has not been disbursed, according to a piece in Foreign Policy Magazine:

U.S. economic aid to Pakistan, which totals over $1.5 billion per year, is a key part of the Obama administration's strategy to strengthen the U.S.-Pakistan strategic partnership. However, most of the aid that was allocated for last year is still in U.S. government coffers.

Only $179.5 million out of $1.51 billion in U.S. civilian aid to Pakistan was actually disbursed in fiscal 2010, the Government Accountability Office stated in a report released last week. Almost all of that money was distributed as part of the Kerry-Lugar aid package passed last year.

$75 million of those funds were transferred to bolster the Benazir Income Support Program, a social development program run by the Pakistani government. Another $45 million was given to the Higher Education Commission to support "centers of excellence" at Pakistani universities; $19.5 million went to support Pakistan's Fulbright Scholarship program; $23.3 million went to flood relief; $1.2 billion remains unspent.

None of the funds were spent to construct the kind of water, energy, and food infrastructure that former Special Representative for Afghanistan and Pakistan (SRAP) Richard Holbrooke advocated for diligently when he was the lead administration official in charge of managing the money. Moreover, according to the report, the Obama administration hasn't yet set up the mechanisms to make sure the money isn't misspent.
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"While the facts of the GAO report are accurate, it doesn't reflect the big picture nor adequately represent what we've achieved with civilian assistance over the last year," said Jessica Simon, a spokesperson for the SRAP office. "As the FY 2010 funding was appropriated in April 2010, it is hardly surprising that only a portion of the funding was disbursed by the end of the year."

Simon said that in total, the U.S. government has disbursed $878 million of Pakistan-specific assistance since October 2009, which includes over $514 million in emergency humanitarian assistance in response to the devastating July 2010 floods.

The floods also slowed the progress of the Kerry-Lugar program, Sen. John Kerry's spokesman Frederick Jones told The Cable.

"The floods last summer changed the Pakistani landscape, literally and figuratively, and required us to take a step back and reexamine all of our plans," Jones said. "Bureaucracies move slowly and redirecting aid at this level requires time and some patience. It is difficult to allocate billions of dollars in a responsible way without proper vetting, which takes time."

Experts note that the disparity between U.S. promises to Pakistan and funds delivered is a constant irritant in the U.S.-Pakistan relationship.

"There are always complaints and in terms of the delays there are pretty valid reasons on both sides," said Shuja Nawaz, director of the South Asia Center at the Atlantic Council. He said that Congress's requirement that the money be tracked and accounted for is a source of contention.

"For a long time the U.S. didn't ask any questions about the money. And so it became a bit of a shock," he said.

The GAO has long called for better oversight of the funds, especially in Pakistan's Federally Administered Tribal Areas (FATA). This lack of accountability is what spurred Congress to mandate better oversight of the Kerry-Lugar money, including provisions that require reporting on the Pakistani military's level of assistance to the United States.

...

April 10, 2011 at 5:02 PM  
Blogger Riaz Haq said...

Here's a Dawn-AFP story about a modest job recovery in Pakistan's textile sector with rising exports:

KARACHI: After a year of unemployment and wondering if his family would be better off if he died, Pakistani textile worker Murad Ali has got the spring back in his step.

One of thousands laid off by textile bosses last year, the father of four is now back at work and one of those to benefit from a surge in Pakistani exports in the current fiscal year, which ends on June 30.

Experts say rising global commodity prices, a government decision to prioritise power supply to industry and currency devaluation that has made Pakistani products more competitive, have fired an export boom.

Compared with the same period last year, the Trade Development Authority of Pakistan says textile exports such as silk rose 25.8 per cent and agricultural produce, such as basmati, rose 6.2 per cent from July to February 7, 2011.

The textiles sector is one of the key drivers of the Pakistani economy, accounting for 55 per cent of all exports and 38 per cent of the workforce, according to official figures.

Bosses have rehired staff who were laid off, but Ali is only getting a third of the salary as a skilled garment worker that he used to command.

“I’m earning less than last year. It is difficult to live a better life due to price rises, but I’m happy,” Ali said.

He has re-enrolled his sons at school but his wife will continue to work as a maid. Money is too tight for her to go back to being a housewife.

“The situation has drastically changed in the favour of the country’s economy,” said textile tycoon Mirza Ikhtiar Baig, who employs more than 2,000 workers and predicts exports will rise 10 per cent for the fiscal year 2010 to 2011.

“Now with demand for Pakistani products rising internationally we are employing more workers.

“Our exports are getting healthier because of an increase in international commodity prices and the government’s will to give top priority to the country’s economy,” said Baig, an advisor to Prime Minister Yousuf Raza Gilani.

The Asian Development Bank forecasts GDP growth for Pakistan of 2.5 per cent for fiscal year 2011 despite pressures from unprecedented floods in 2010, with a relatively modest rebound to 3.7 per cent for fiscal year 2012.
-------------
Pakistan suffers from a profound electricity crisis that restricts production to around 80 per cent of its needs — a situation that will only worsen as the temperatures crawl higher in the coming months.

The budget deficit has grown to 5.5 per cent of GDP, above a 4.9 per cent target for the current fiscal year to June 30.

To fund the shortfall, the government borrowed $4.4 billion from the central bank from July 1 to February 28, a move that worsened inflation, rather than raise taxes and cut spending as the IMF and World Bank would like.
---------
Mohammad Sohail, head of the Karachi-based Topline Securities research and brokerage house, said the export boom would contribute to economic recovery, yet warned the gains were minimal.

“It is very fragile because the fiscal deficit is much higher than the target of 5.3 per cent because of the government’s heavy borrowing from the central bank,” he said.
----------
“Furthermore, the overall security situation in Pakistan is very uncertain, which is making the foreigners and local investors wary all the time.” Independent economist A.B. Shahid said rising international oil prices had hit the country’s economy hard, adding $4 billion to the oil bill.

Pakistan could have benefited more from 8-9 per cent export growth, he said, by exporting cloth in its value-added forms rather than raw cotton and yarn.

While Ali is content with life, he is also wary of uncertainties ahead.

“Life has become too insecure. Everyone is ill at ease. Let’s just wait and see.” – AFP

April 14, 2011 at 10:57 PM  
Blogger Riaz Haq said...

Pakistan's July 2010-March 2011 current account surplus at $99 mln, according to Reuters:

Pakistan's current account surplus for July-March period was a provisional $99 million, compared with a deficit of $3.106 billion in the same period last year, the central bank said on Monday.

In March, the current account was a provisional surplus of $347 million, compared with a deficit of $2 million in February.

The current account deficit for the fiscal year 2009/10 was $3.946 billion, compared with $9.261 billion in fiscal year 2008/09.

April 18, 2011 at 9:41 AM  
Blogger Riaz Haq said...

Here's a Wall St Journal report on World Well-being Gallup survey that puts Pakistanis ahead of Indians:

The results of the 2010 global wellbeing survey of 124 nations conducted by Gallup reveals that only about 21% of people consider themselves “thriving,” the highest level of wellbeing.

Around 1000 people over the age of 15 were asked whether in their lives they felt they were “thriving,” “struggling,” or “suffering,” measured on a scale from zero to 10. Anything seven or above was considered as thriving, according to the methodology used in the study.

India fared worse than average. Based on the findings, it ranked 71st in the list, with only 17% of respondents reported as thriving. (This was in line with the broader Asian average).

India’s neighbor Pakistan, despite its more volatile political and economic situation, ranked 40th, with 32% of the people describing themselves as thriving.

This category means more than just general wellbeing, and includes better overall health, measured in terms of fewer sick days, less stress or sadness, and more happiness and respect.

Alarmingly, in India 64% of people saw themselves as struggling. The survey describes people who fall into this category as being more stressed, more concerned about their economic wellbeing and less healthy, in terms of their lifestyle and eating habits.

The Danish lead the wellbeing list with 72% falling into the thriving category, while Chad ranked lowest, with only 1% describing themselves as such. Americans ranked average, with 59% of them thriving and only 3% suffering.

China, despite its impressive GDP figures, didn’t do that well, with only 12% of people describing themselves as thriving.

While there were gaps between developed and developing countries, a lot also depended on a country’s political situation and natural disasters, the survey shows. For instance, Haiti, where the 2010 earthquake claimed the lives of up to 250,000 people, those in the thriving range are only 2%.

Overall, the survey findings reveal how GDP figures alone are not sufficient to measure a country’s wellbeing. (This comes close to Gross National Happiness, which the Himalayan kingdom of Bhutan famously adopted in the 1970s.)

“As the uprisings in Tunisia and Egypt showed earlier this year, leaders should not rely on GDP alone as an indicator of how well their countries and their citizens are doing. Monitoring and improving behavioral economic measures of wellbeing are important to helping leaders better the lives of all their residents,” the survey reveals.

Consultant of psychiatry at New Delhi’s Moolchand Medcity, Dr. Jitendra Nagpal held a similar view. In an emailed response to India Real Time, Dr. Nagpal also agreed that nations whose people claim to be happy may or may not be economically sound. Dr. Nagpal added that happiness is more about the ability to do what you want to do, rather than fulfilling life’s basic needs.

April 23, 2011 at 12:16 PM  
Blogger Riaz Haq said...

Pakistan’s exports were projected at an estimate of USD 24 billion, highest figure so far. Moreover, the remittances in Pakistan are expected to touch USD 11 billion this year and growth rate is estimated at 4.1%, according a report in The News:

ON the invitation of Punjab Board of Investment and Trade (PBIT), world renowned expert on investment promotion Carlos Bronzatto spoke at a seminar “Investment Promotion 101”. Carlos Bronzatto is visiting Pakistan in the capacity of the Chief Executive of the World Association of Investment Promotion Agencies (WAIPA).

Chief Executive Officer, PBIT Saadat Muzaffar, welcomed the high level participants from government and the private sector and said that despite the global economic slowdown, Pakistan was poised to make an economic recovery. He said Pakistan’s exports were projected at an estimate of USD 24 billion, highest figure so far. Moreover, the remittances in Pakistan are expected to touch USD 11 billion this year and growth rate is estimated at 4.1%. He also said that Carlos Bronzatto’s visit signalled a very positive sign from the international community to support Pakistan’s aim to increase FDI in the country.

Chief Executive WAIPA Carlos Bronzatto delivered a comprehensive way forward for Pakistan to promote its investment opportunities. During that session, he provided insight about the investment evolution, core functions and key concept.

He particularly talked about the use of information to influence investment decisions, incentives for long-term development, the targeting of investors and the integration of large global corporations with local stakeholders and communities.

Punjab Board of Investment and Trade is a strategic member of the steering committee of WAIPA which represents South Asia in this committee.

PBIT is the first Investment Promotion Agency from Pakistan to be a part of this international organisation. WAIPA was created in 1995. It was established as an Association under Swiss law. WAIPA Members include 244 national and sub-national agencies from 162 different countries. Through its wide range of activities, WAIPA provides the opportunity for investment promotion agencies (IPAs) to network and exchange best practices in investment promotion.

May 13, 2011 at 9:16 PM  
Blogger Riaz Haq said...

Pakistan posts over $700 million current account surplus in forst ten months of fiscal 2010-11, thanks to rising remittances and record exports, according to The Nation:

KARACHI - Pakistan’s current account has recorded a surplus of $784 million in the first ten months of current fiscal year 2010-11 against deficit of $3.456 billion in the same period of last year due to rising remittances from overseas Pakistanis and steady exports, the SBP reported on Tuesday.
The current account deficit lowered to 0.5 per cent of GDP when compared to the growth of 2.4 per cent of GDP during the same period last year.
The reduction in the growth of current account deficit was caused by increase in exports and record inflow of current transfers especially workers’ remittances. The current transfer increased to $12.907 billion in Jul-Apr FY11 from $10.458 billion during the same period of previous fiscal year.
According to balance of payments statistics released by the State Bank of Pakistan yesterday, as on April 30, 2011 current account balance without off transfers amounted to $271 million against $3.866 billion over the equivalent period of FY10.
Trade account, which is the largest component of the current account, declined to $8.285 billion compared to $9.292 billion. Balance of goods and services stood at $9.677 billion during the first ten months of current financial year against $11.229 billion in the past year. Total goods exports rose to $21 billion during Jul-Apr FY11 from $17 billion of the reported period of the previous year while imports also up $29 billion from $26 billion.
From July 01 to April 30, 2011, capital account dropped to $86 million against $154 million while financial account declined to $412 million against $3.533 million due to delay in IMF funding and below than expected financing from the other international financial institutions.

May 22, 2011 at 10:33 PM  
Blogger Riaz Haq said...

State Bank of Pakistan Holds Discount Rate at 14.00%, according to Central Bank Info:

The State Bank of Pakistan held its discount rate unchanged at 14.00% as inflation pressures eased somewhat, and as the Bank waits to analyze next month's annual government budget. The Bank noted: "The government is mindful of fiscal pressures and has expressed its resolve to address these issues, especially containment of the fiscal deficit. The budget for FY12 is expected to reflect this commitment,". Pakistan reported annual inflation of 13.04% in April (with prices rising 1.62% month on month), on inflation the Bank commented that "the average CPI inflation for FY11 is likely to remain between 14 and 14.5 percent, which is lower than the central bank's earlier projections,".

May 23, 2011 at 5:22 PM  
Blogger Riaz Haq said...

Pakistan Per capita income rises to $1254, according to Daily Times:

ISLAMABAD: Pakistan’s per capita income rose to $1,254 in 2010-11 from $1,073 during last year, showing tremendous increase of 16.9 percent, according to the Economic Survey of Pakistan. Enhancement in per capita income is mainly because of stable exchange rate as well as higher growth in nominal gross national product (GNP). Per capita real income has risen by 0.7 percent in 2010-11 against last year’s 2.9 percent. Real private consumption rose by 7 percent as against 4 percent attained last year, it added. However, gross fixed capital formation lost its strong growth momentum and real fixed investment growth contracted by 0.4 percent as against the contraction of 6.1 percent last year. Total investment has declined from 22.5 percent of GDP in 2006-07 to 13.4 percent of GDP in 2010-11. National savings rate has decreased to 13.8 percent of GDP in 2010-11 against last year’s 15.4 percent of GDP. Domestic savings also declined substantially from 16.3 percent of GDP in 2005-06 to 9.5 percent of GDP in 2010-11. The national budget for the fiscal year 2011-12 would be unveiled today (Friday). app

June 11, 2011 at 10:18 AM  
Blogger Riaz Haq said...

Pakistan harvests bumper crop of wheat in spite of floods, reports Dawn:

ISLAMABAD: Pakistan is expected to produce at least 25 million tonnes of wheat in its 2010/11 crop, Finance Minister Hafiz Shaikh said on Friday, higher than the initial estimate.

“We are expecting that our wheat crop this year will cross 25 million tonnes,” he told reporters.

Industry officials had earlier feared the output would fall to 23.5 million tonnes against a target 25 million tonnes, after a decline in the area under wheat cultivation because of massive floods in 2010 and fertiliser shortages.

A food ministry official said good output was expected because of increased fertility in wheat-growing areas after the floods.

Pakistan produced a bumper crop of 23.8 million tonnes of wheat last year. The country consumes about 22 million tonnes a year. Harvesting of the 2010/11 crop is underway.

Asia’s third-largest wheat producer, Pakistan resumed wheat exports in January for the first time in three years after the government lifted a ban in December.

The three-year ban was lifted when the 2009/10 crop and carryover from the previous stocks led to market surplus.

Traders earlier hoped to export up to three million tones of wheat this year, but the quantity may now exceed that following new wheat output estimates.

The country had already exported or contracted to sell about 1.5 million tonnes of wheat so far.


http://www.dawn.com/2011/04/08/pakistan-sees-at-least-25-mln-t-wheat-from-201011-crop.html

June 24, 2011 at 9:41 AM  
Blogger Riaz Haq said...

Agriculturists expect substantial crop growth in financial year 2011/12 because of timely availability of water, according to The News:

General Secretary Sindh Abadgar Board, Syed Mehmood Nawaz Shah, told The News on Thursday that contrary to outgoing financial year, all crops are likely to record bumper output in 2011-2012 thanks to timely and sufficient availability of water.

He said that the problem is management of the upcoming bumper crops and they fear decline in prices as prices of cotton have gone down in the international market.

Pakistan Central Cotton Committee has set a target of 15 million bales this year. Cotton has a share of 6.9 percent in agriculture and 1.4 percent in GDP.

In 2010/11, major crops declined by four percent and farm sector recorded a modest growth of 1.2 percent.

Cotton and rice production remained low because of floods and rain, but wheat and sugarcane recorded growth, which saved the agriculture sector from negative growth.

Economic Survey of Pakistan 2010-11 said cotton was cultivated on an area of 2,689 thousand hectares, 13.4 percent less than last year (3,106 thousand hectares). The production is estimated at 11.5 million bales, lower by 11.3 percent over the last year’s production of 12.9 million bales and 17.9 percent less than the target of 14 million bales.

The reasons for decrease in production is loss in area under cultivation due to floods, rains, widespread attack of Cotton Leaf Curl Virus (CLCV) and sucking pest in core and non-core area, shortage of water due to canal closure during flood.

Shah said that CLCV attacked cotton in Punjab in the end of June, so this year they have sown early crop, whose results are still not known.

Sugarcane was cultivated on an area of 988,000 hectares, 4.8 percent higher than last year’s level of 943,000 hectares.

Sugarcane production for the year 2010-11 is estimated at 55.3 million tons as against production of 49.3 million tons last year, a rise of 12 percent.

Sugarcane is a major raw material for the production of white sugar and gur and is also a cash crop. Its share in value-added sector of agriculture and GDP is 3.6 percent and 0.8 percent, respectively.

Sources say that better market prices and timely payments by sugar mills encouraged farmers to grow more crop.

Area sown for rice is estimated at 2,365,000 hectares, 17.9 percent less than last year (2,883,000 hectares).

Rice has a share of 4.4 percent in agriculture and 0.9 percent in GDP. Pakistan grows high quality rice to meet both domestic demand and exports.

Rice production is likely to decline by 26 percent to 5 million tons in 2010-11 from 6.8 million tons last year, said a market source.

Rice export from Pakistan would be 2.6 million tons in FY2010-11 as compared with 3.8 million tons in 2009-10.

Rice productivity in Pakistan increased from the 1960s to the 1990s. Since then, it has seen a fall of about one percent per year. Therefore, it could not keep up the pace with growing demand, Ahmad Jawad, CEO of Harvest Trading told The News.

Major reasons for fall in rice production were floods and low market prices last year. Floods attacked mostly paddy growing areas in Sindh.

Area and production target of wheat for 2010-11 had been set at 9,045,000 hectares and 25 million tons, respectively. Wheat was cultivated on 8,805,000 hectares, showing a decrease of 3.6 percent over last year’s area of 9,132,000 hectares. However, a bumper wheat crop of 24.2 million tons has been estimated with 3.9 percent increase over the last year’s crop of 23.3 million tons.

Production of wheat increased due to timely fertiliser use and rainfall during pre-harvesting period.

Wheat is the main staple food for most of the population and largest grain source of the country. It contributes 13.1 percent to the value-added sector of agriculture and 2.7 percent to GDP.

June 24, 2011 at 10:36 AM  
Blogger Riaz Haq said...

Here's an interesting Op Ed by Kamal Monnoo, a Pakistani industrialist, as published in The Nation:

Agreed, that some of the macro-indicators in Pakistan are showing healthy trends or resilience, exports are up, current account deficit is down, remittances are climbing, reserves are stable and the Pak Rupee is holding out, but gauging from the manufacturing and productivity figures over the last two quarters could Pakistan’s economy be finally sliding into a serious recession? Riding on the back of some positive figures, the economic managers have thus far not only been blowing their own trumpet of success, but also literally ignoring and mocking their critics, who have tried to draw their attention to the missed opportunities and rather weak economic scaffolding that can simply crumble one day without warning like a house of cards!
Based on industrial production and productivity (especially in the small and medium enterprise sector) Pakistan’s economy contracted by nearly 4 percent - much more than expected - for at least two quarters running now, which basically means that technically we have already entered recession. Going by this, the big question actually should be that does the country have the political and economic will to fight its way out? The data underlines how the worst natural disaster (floods) to hit Pakistan in decades has foiled all hope of recovery and how the government’s addiction to borrow and the absence of visionary economic policies have contributed to the decline leaving the country in a vicious trap of high debt and a low growth amidst a rapidly rising population.
The global scenario is not helping either. Serious downturns both in the United States (where the predictions of recovery continue to be proven wrong) and the Western European economies, the two main markets for Pakistani goods, mean that the coming months for Pakistani exporters will be even tougher. All political endeavours on ‘trade not aid’ and preferential ‘market access’ in lieu of our help in the war on terror have also not been fruitful so far. What this basically tells us is that to avoid sinking we need to look inwards and start taking our own measures to embark on a path of economic recovery before the recession turns into an economic quicksand. Time and again, I have pointed out to the examples of China, India and Bangladesh, who have consciously maintained focus on manufacturing at home as their ticket to sustained economic activity and job creation. To help keep their engine of the industry running all related state and private sector institutions, banking/financial, power and energy, human resource, commerce and trade, have played their due role.


http://nation.com.pk/pakistan-news-newspaper-daily-english-online/Opinions/Columns/29-Jun-2011/Is-economy-entering-recession

June 28, 2011 at 10:18 PM  
Blogger Riaz Haq said...

Pakistan to end IMF program, reports Dawn:

..The government’s inability to implement three major economic policy commitments — limiting fiscal deficit to 4.7 per cent of GDP, introducing integrated value added tax (VAT) and power sector reforms — will lead to technical completion of an unsuccessful $11.3 billion programme with the International Monetary Fund (IMF) on September 30, according to Finance Minister Dr Abdul Hafeez Shaikh.

This is the eighth programme with the IMF to conclude on an unsuccessful note. On the eve of the departure of Pakistan’s economic team for Washington to attend annual meetings of the IMF and World Bank, the finance minister told journalists that Pakistan would not waste its energy on revival of the incomplete programme or seek a fresh programme owing to a comfortable external balance of payments position.

He, however, said the government would stay on course on power sector reforms and macroeconomic adjustment and stabilisation programme and take steps so that it has reasonable credibility to return to the IMF programme with ease in case of any difficulty with external account.

--

Officials said the government might have to increase electricity tariff by 10-12 per cent if it succeeded in pushing forward the power sector reforms to reduce subsidies. The Deputy Chairman of the Planning Commission, Dr Nadeem ul Haque, said he could not even imagine the quantum of tariff increase required to be introduced in case reforms failed to progress because the power sector’s financing gap stood at about Rs250 billion this year.

Officials said the government had committed to the IMF to contain the fiscal deficit below 4.7 per cent of the GDP after the last year’s floods, which was later revised to 5.3 per cent of the GDP. However, the government could not meet even the revised fiscal deficit limit which officially exceeded 5.9 per cent at the end of the financial year on June 30 this year.

The government also could not introduce the value added tax in an integrated form and then it could not show a good performance on power sector reforms which also contributed to higher than anticipated fiscal deficit.

The official said both the government and the IMF understood that spending energy on revival of existing programme for a couple of billions of dollars were of no use.

The government’s comfortable feeling stems from anticipated $37 billion earnings from a five per cent growth in exports and strong workers’ remittances during the current fiscal year, enough to meet the country’s foreign exchange requirements with a current account deficit of about 1-2 per cent.

The officials said the government would have to repay $1.2 billion to IMF during the current year in two instalments and it estimated a gap of $500 million to a maximum of $2 billion during the year.

The finance minister tried to explain how the government could remain fiscally responsible in the absence of an IMF programme when elections were fast nearing. Reminded that the previous government had given up the IMF programme prematurely which later led to a freezing of power tariffs and build-up of oil-related subsidies and that the current government was also following the same path ahead of elections to leave a poor economy for the next government, the minister said elections were never discussed in any official meeting.


http://www.dawn.com/2011/09/17/pakistan-to-end-imf-programme.html

September 17, 2011 at 8:07 AM  
Blogger Riaz Haq said...

Chemical, pharma products export up 43%, reports Daily Times:

KARACHI: The export of chemicals and pharmaceutical products increased by 43 percent in first quarter of 2011-2012 July, September as compared to same period last year, Federal Bureau of Statistics FBS data said.

Pakistan exported chemicals, pharmaceutical products worth $257 million during July-September 2011 as against $179 million in July- September 2010. Chemicals products export rose by 39.76 percent, increasing from $82.40 million to $115.17 million. Pharmaceutical products export stood at $29.10 million as against $33.90 million in same period of last fiscal.

http://www.dailytimes.com.pk/default.asp?page=2011\11\15\story_15-11-2011_pg5_6

November 14, 2011 at 6:48 PM  
Blogger Riaz Haq said...

Here's the latest IMF assessment of Pak economy, as reported by The News:

ISLAMABAD: The International Monetary Fund (IMF) on Saturday said that Pakistan’s economy is braving serious challenges of an energy crisis and fast dwindling investment that is why it needs to ramp up efforts to carve out a long-term recipe to stimulate growth and reduce rising unemployment.

Pakistan’s economy is exposed to the worst effects of the floods and appalling security. The government has though undertaken many economic reforms, yet there are many serious challenges of energy crisis and dwindling investment.

Adnan Mazarei, Assistant Director of IMF for Middle East and Central Asia, after a seminar on “Revival of Pakistan Economy” stated this during a press briefing here on Saturday.

Mazarei expressed his dissatisfaction over the government’s performance in the energy sector and asked it to restructure the power sector to make it turn around. “The broadening of the tax base is also one of the biggest challenges the Pakistan economy is braving as the political consequences also negatively impact on the economy and people avoid paying taxes because they wanted an honest government and some dividends in return.”

He said that fiscal imbalances are also needed to be addressed. “Pakistan needs inclusive growth and employment generation as well as better distribution of resources and lowering of poverty rate to ensure equitable benefit to the people.”
-------------
Finance Minister Dr Abdul Hafeez Sheikh said that role of the government representative during the day-long seminar was to listen to the economists, business community and development partners and share with them the steps taken for the economic reforms in the country. He said the economic team held very constructive discussion with the IMF during Article IV discussion in Dubai on economic reforms and about way forward policy mix to move on to high growth path.

Hafeez Sheikh said that first four months of the current fiscal year were very positive with exports going over 6 billion dollar which were 23% more than the same period of previous year and remittances 4.2 billion dollars, 23% up by the same period of last year. The minister said the growth in taxes during the first four months was 28% with total collection of Rs509 billion compared to the same period of last year.


http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=10412&Cat=13

November 19, 2011 at 5:30 PM  
Blogger Riaz Haq said...

Here's is an APP report on UAE Trade & Investment Expo 2011 in Karachi:

KARACHI, Dec 01 (APP): Speakers at UAE trade and investment conference at Karachi Expo Centre said Thursday that Pakistan was a growing market and UAE companies operating here would stay and make long term strategic investment. President and CEO of Pakistan Telecommunication Company Ltd (PTCL) Walid Irshaid said that his company will make more investment in Pakistan to fully transform PTCL into a world class telecome company.
“We have transformed PTCL into a modern company offering all ICT products in Pakistan and we are here to stay”, he said while sharing the experience of his company in Pakistan and investment opportunities.
He said that “Pakistan is a growing market and we are making long term investment to offer world class network to local consumers who are quality conscious”. Do not underestimate Pakistani consumers, he suggested.
Regional general manager Asia Pacific North and Indian sub continent Etihad Airways, Joost den Hartog said that his airline was doing great business in Pakistan.
“We are running daily flights from Karachi, Islamabd, Lahore to UAE and twice a week from Peshawar. We are planning to enhance our operations in Pakistan in future with the expansion of our fleet”, he noted.
Hartog said that his airline is now catering for Pakistanis living in USA, Canada, Europe and Middle East and will soon start lifting Pakistani passengers for Frankfurt and Munich.
Pakistani Ambassador in UAE Jamil Ahmed Khan advised Pakistani businessmen to take full advantage of opportunities in the Emirates for re-export business. He said that 40 percent of the exports to UAE are re-exported to African countries.
He said that Pakistani exports to UAE can be enhanced from 2 percent of Emirates’ global trade to 6 percent with the help of planned efforts.
Chief Executive Officer of Bank Al Falah, Atif Aslam Bajwa said that his bank is growing fast in Pakistan and “we have plans to further expand our operations in the country”.
Chief Executive Officer, FlyDubai, Ghaith Al Ghaith said that the business of his airline has increased in Pakistan by 10 percent while it is growing worldwide at 12 percent. “We are planning to further expand our business here”.
CEO Dubai Islamic Bank Junaid said his bank has plan to expand its branch network from 73 to 100 in Pakistan by next year and offer the entire range of Shariah compliant products in Pakistan.
Director of IBA Dr Ishrat Husain said that foreign investors were never touched in Pakistan by any regime even during the nationalization in 1972.
He said Pakistan has liberalized its foreign exchange regime and profits, royalties, fees can be fully repatriated.
Acting President of FPCCI Khalid Tawab said that business chambers are playing their full to expand bilateral trade and investment between Pakistan and UAE.
Meanwhile, consul generals and commercial officers of USA, China, Germany, Japan, Russia, Afghanistan and Korea also visited UAE Expo 2011 Magnificent 7 and took keen interest in the products at display.


http://ftpapp.app.com.pk/en_/index.php?option=com_content&task=view&id=168041&Itemid=49

December 1, 2011 at 3:27 PM  
Blogger Riaz Haq said...

World Bank’s new estimates released on Thursday placed Pakistan among top 10 recipients of remittances among developing countries, fetching $12 billion this year, reports Dawn:

India leads with $58 billion followed by China at $57 billion, Mexico $24 billion and the Philippines $23 billion.

Bangladesh follows Pakistan with $12 billion, Nigeria 11 billion, Vietnam $9 billion and Egypt and Lebanon $8 billion each.

Remittance costs have fallen steadily from 8.8 per cent in 2008 to 7.3 per cent in the third quarter of 2011.

The ‘Outlook for Remittance Flow 2012-14’ shows that the officially recorded remittance flows to developing countries are estimated to have reached $351 billion in 2011, up 8 per cent over 2010.

Worldwide remittance flows, including those to high-income countries, reached $406 billion in 2011 and are expected to rise to $515 billion by 2014.

There are several sources of vulnerability to forecasts for remittances to developing countries.

The ongoing debt crisis in Europe and high unemployment rates in high-income OECD countries are adversely affecting economic and employment prospects of migrants.

These persistently high unemployment rates have created political pressures to reduce current levels of immigration.

There are risks that if the European crisis deepens, immigration controls in these countries could become even tighter.

This would affect remittance flows to all regions – especially to countries in Eastern Europe and Central Asia.

The World Bank report says that high oil prices, which have hovered over $100 a barrel in recent months, continue to provide a much-needed cushion for migrant employment in, and remittance flows from, the Gulf Cooperation Countries (GCC) and Russia. Oil driven economic activities and increased spending on infrastructure development are making these countries attractive for migrants from developing countries.

Remittances from the GCC countries to Bangladesh and Pakistan where the GCC countries account for 60 per cent or more of overall remittance inflows grew by 8 per cent and 31 per cent, respectively in the first three quarters of 2011 on a year-on-year basis.

The Pakistan Remittance Initiative (PRI), a joint initiative of the central bank and Pakistan’s government, has been working actively with commercial banks and money transfer operators to lower the cost of inward remittances and improve the payments systems and delivery channels in order to bring a larger share of remittances into formal channels.

The indigenisation programmes being considered or implemented in the GCC countries like the ‘Nitaqat’ programme in Saudi Arabia have raised concerns of adverse implications for future remittances to the Philippines, Pakistan, Bangladesh and other migrant-sending countries, it says.

http://www.dawn.com/2011/12/02/wb-report-pakistan-among-top-10-recipients-of-remittances.html

December 1, 2011 at 10:29 PM  
Blogger Riaz Haq said...

Here's Express Tribune on Saudi Arabia hiring thousands of Pakistani doctors:

Dr Nawaz* (not his real name) is a medical officer (MO) at Mayo Hospital and, like all government-employed doctors in BPS-17, got a Rs15,000 raise last year, taking his monthly pay to Rs44,000. Yesterday, the Saudi Arabian Ministry of Health offered him a job for 6,000 riyals (Rs145,000) a month.

“It’s a handsome offer. I’m going to take it,” said the doctor after an interview with the Overseas Employment Corporation, a Pakistani government agency that is hiring doctors for Saudi Arabia.

At Mayo Hospital, Dr Nawaz has to serve in shifts of up to 48 hours straight. In Saudi Arabia, he will get two days off each week and work eight-hour days.

“Here we have a lot of uncertainty. We cannot get a raise unless we protest and boycott work. I am getting out of it,” he said.

Dr Nawaz has been in a government job for three years and said he would resign before leaving. However, many doctors with more years in government service will likely seek permission from the government to go on leave to Saudi Arabia so they can return to their government jobs upon coming back to Pakistan.

Two private Saudi agencies are also interviewing Pakistani doctors for posts in government hospitals in Saudi Arabia. Saturday was the last day of interviews in Lahore. Interviews in Islamabad will take place from January 11 to 13.

“Around 3,000 doctors have been interviewed in Lahore for different positions including residents and consultants,” an OEC official told The Express Tribune.

He said that the Saudi government had recently built a lot of new hospitals and they were short of doctors. He did not say how many doctors the Saudis aimed to hire from Pakistan.

Residents (trainee doctors) are being offered salaries of between 5,000 (Rs121,000) and 8,000 riyals (Rs193,000), while consultants with a fellowship are being offered between 12,000 (Rs290,000) and 16,000 (Rs387,000) riyals. Senior professors and associate professors are being offered up to 30,000 riyals (Rs725,000) per month.

Last year, the Saudi Ministry of Health hired a thousand Pakistani doctors. Shortly afterwards, government-employed doctors in Punjab went on strike to demand better pay.

“This time they are going to hire more doctors,” said a senior doctor who went for an interview.

“The Indian government has just increased the salaries of public doctors and no Indian doctors are going to Saudi Arabia. They are focusing more on Pakistani doctors this year.” The Pakistan Medical Association warned that the country was losing its best doctors to Saudi Arabia and urged the government to improve the service structure for health professionals to stop the brain drain.

“The government on one hand claims to invest in health and education and on the other it does nothing to stop the brain drain,” said PMA Joint Secretary Dr Salman Kazmi.

“The government announces a pay package for doctors and nurses only when they go on strike or take to the streets. This is no solution. The government needs to develop a structure otherwise we may run out doctors.”

A Health Department spokesman said that the government couldn’t match the salaries offered to doctors abroad, especially when they had only recently been given raises. He said the government spent hundreds of millions of rupees on educating and training doctors and they should consider reasons other than monetary for working in Pakistan.


http://tribune.com.pk/story/318194/saudi-arabia-to-import-thousands-of-pakistani-doctors/

January 8, 2012 at 7:45 AM  
Blogger Riaz Haq said...

Here's Pakistan's report card on balance of payments in Jul-Dec 2011 period as reported by Daily Times:

“Cumulative figure shows that Pakistan’s exports during July-December 2011-12 were $11.241 billion, while in the corresponding period of the last year 2010-11 exports were $10.815 billion, which shows 3.94 percent growth,” TDAP official said. “Imports during July-December 2011-12 were $22.713 billion compared to $19.102 billion during the same period of the year 2010-11, registered a 18.9 percent growth,” it added.

“Pakistan’s exports during December 2011 were valued at $1.854 billion, which was 11.5 percent lower than the level of $2.094 billion during December 2010,” the official said. “Imports during December 2011 were valued at $4.261 billion registering a growth of 13.6 percent over the level of imports valued at $3.751 billion in December 2010,” he said.

According to the State Bank of Pakistan, overseas Pakistani remitted an amount of $6.33 billion in the first half (July–December 2011), showing an impressive growth of 19.54 percent or $1.034 billion compared with $5.291.43 billion received during the same period of last fiscal year (July- December 2010).

The monthly average remittances for July-December 2011 period comes out to $1.054 billion as compared to $881.91 million during the same corresponding period of the last fiscal year, registering an increase of 19.54 percent.

Pakistani currency (Pak rupee) fell to a record low against US dollar owing to the country’s trade deficit.

Rupee slid 0.3 percent, most since December 27, before Federal Bureau of Statistics published trade data for last six months this week.

Rupee is being traded around at Rs 91.00 to Rs 91.50 against a dollar, weakest level at least since 1988. It may fall to 95 by end of June, Standard Chartered’s Ali predicted.

Last week, the governor SBP has informed the Senate Standing Committee on Finance, “the likelihood of a sharper fall in foreign exchange reserves is strong in the second half of 2011-12 due to large repayments of external debt, including $1.2 billion of IMF loan, are due in second half.”

SBP officials agreed with the members that in case foreign inflows were not materialised, reserves might fall by $5 billion from current level. It was informed that pressures on foreign exchange reserves and exchange rate have increased, reserves have declined by $1.2 billion up till December 30 ongoing fiscal year 2011-12. Rupee, against the dollar, has depreciated by 4.4 percent up till December 30. SBP is managing excess volatility in Pak Rupee, but is not going against market fundamentals. Timely realisation of planned official inflows is essential for maintaining comfortable level of reserves.

Inflation is declining but still high, trends in cotton and oil prices are severely affecting the external current account.

Net capital and financial flows are inadequate to finance the current account deficit.

The year-on-year inflation in December 2011 is 9.7 percent, but the full year inflation is expected to remain close to the target of 12 percent.

Country, foreign exchange reserves have again touched to $17 billion and keeping in view the trade trends, Pakistan trade deficit would not go beyond $14.5 billion.


http://www.dailytimes.com.pk/default.asp?page=2012\01\11\story_11-1-2012_pg5_1

January 10, 2012 at 4:58 PM  
Blogger Riaz Haq said...

Here's a Daily Times report on Finance Minister Hafeez Shaikh's assessment of Pak economy:

Federal Minister for Finance and Economic Affairs Dr Abdul Hafeez Shaikh while briefing the parliamentarians about the national economy informed that the government would receive $2.5 billion in foreign exchange in the coming months from Etisalat’s pending dues, CSF from US, and Auction of 3-G Spectrum Licence.

He highlighted the achievements so far made by this present government, hurdles and subsequent solutions in the way of Pakistan’s economy. He apprised of the three factors, which are for causing the burden on our national economy. First, great flood in 2010, which caused damage of $10 billion as estimated by the World Bank, increase in oil prices at the international level and security situation.

While highlighting the tax revenue position he said that 17 percent increase has been achieved during the last six months, export touched historical way by up to 28 percent with respect to previous year, and remittances showed a star performance. In addition to that, foreign exchange reserves touched the highest figure in the history of Pakistan, he said.

He also said that we are facing certain issues in power and gas sector, Pakistan International Airlines, Pakistan Railways (PR), and Pakistan Steel Mills (PSM) but he said that the Cabinet Committee on Restructuring of the Public Sector Enterprises has been relentlessly working on revamping these enterprises and we have made certain very good advances in this regard, and hopefully these corporations shall start functioning under the economic vision of the present government. He said these issues are overshadowing our tremendous performance in the economy and said that like PSM are always source of criticism on our government and this must be seen in the political context only. While pondering on the PR, he said that the government has managed to create a consortium of banks to provide the requested Rs 6 billion to PR and said that government of Pakistan is paying the salaries and pension of PR’s service and retired workers. Although the PR is a public sector corporation, which should by itself arrange their salaries and pensions, moreover the government is going to pay to the electricity bill of PR also.

The meeting was told that the government has reached single digit inflation and in addition to that, export witnessed an increase by 4 percent in last six months, import increased by 18 percent, which is also an indicator of increasing activity in our economic and commercial field.

The minister hoped that the government would receive $2.5 billion in foreign exchange in the coming months, from Etisalat’s pending dues, CSF form US, and Auction of 3-G Spectrum Licence. The minister has also said that the government must be credited for some of the outstanding measures taken for the improvement of the country’s poor, that is the provision of Balochistan package, funding to the Gilgit Baltistan province and AJK, plus the alleviation of poor through the Benazir Income Support Programme through which almost 6 million poor families are getting financial help. As the gas is not been provided to the fertilizer plants, the government has decided to import 1.2 million tonnes of fertilizers so that the poor farmers may not be affected. And in this regard, the government is providing subsidy of Rs 40-50 billion on the prices of fertilizer to the farmers, the minister said.


http://www.dailytimes.com.pk/default.asp?page=2012\01\14\story_14-1-2012_pg5_1

January 13, 2012 at 8:07 PM  
Blogger Riaz Haq said...

Here's an FT story on EU trade concessions for Pakistan textile exports to Europe:

... the proposal has been held up in a series of negotiations at the World Trade Organisation, which must approve the exemptions.

EU officials are optimistic that countries that had raised objections – including India, Bangladesh, Brazil, Indonesia and Vietnam – are now prepared to endorse the measures at a series of WTO meetings in February. France, Italy and Portugal had also initially been wary of the deal, fearing it might hurt their domestic textile industries.

With the WTO hurdles cleared, the EU could enshrine the trade terms as soon as April or May, said Lars-Gunnar Wigemark, the EU ambassador to Pakistan.

“We are hopeful these trade concessions will finally be approved by the WTO, and then adopted into law by the European Union,” Mr Wigemark told the Financial Times on Monday. “It looks very positive.”

The EU hopes the concessions – which are due to last at least two years – will buttress a broader drive by Brussels to improve relations at a time when Pakistan’s ties with the US are at their most strained in a decade.

Pakistan has long lobbied western countries for greater access for its textiles – which account for some 60 per cent of its exports – with limited success.

Under the deal, the EU will remove tariffs on a list of more than 70 items, mainly textile products but also some ethanol.

India, Pakistan’s regional rival, had been one of the first countries to oppose the plan, but shelved its objections last year as both sides began to take steps to improve ties. EU officials have lobbied other countries who had raised objections to follow suit.

The prospect of EU concessions is a ray of light for Pakistan’s battered economy. The country of 180m people achieved robust growth in the first half of the last decade, but expansion has slowed significantly in more recent years due to in part to energy shortages, floods and militant violence.

The central bank warned at the weekend that it would be difficult for Pakistan to achieve its target of 4.2 per cent GDP growth in the 2012 financial year as global prices for its farm exports softened and chronic gas shortages persisted.

Suleman Maniya, an analyst at IGI Securities in Karachi, the commercial capital, believes the EU trade package could generate $100m-$300m of additional textile export earnings a year. Pakistan exported about $13bn of textile products last year, he said. “It’s not a game-changer, but it’s still a welcome boost,” he said of the EU deal.

Pakistan’s textile industry is in the throes of a consolidation that has seen severe shortages of electricity and natural gas force smaller, family-run businesses to close, while the biggest players record healthy profits.

Mr Maniya believes the EU concessions will largely benefit major textile concerns such as Nishat Mills or Gadoon because he says many of the tariff exemptions apply to products such as yarn or cloth that such companies produce in large quantities.


http://www.ft.com/intl/cms/s/0/6de2759e-4b63-11e1-a325-00144feabdc0.html#axzz1kzb4lWPl

January 30, 2012 at 4:56 PM  
Blogger Riaz Haq said...

Cotton availability in Pakistan rises 25% YoY, reports fiber2fashion:

There has been a substantial increase of more than 25 percent in arrival of cotton in Pakistan markets this season compared to last season.

Besides, there has also been a significant rise of 77 percent year-on-year in cotton exports from Pakistan this season.

Citing figures from Pakistan Cotton Ginners Association (PCGA), Mr. Muhammad Azam, Secretary-General and Chief Operating Officer of All Pakistan Textile Mills Association (APTMA), told fibre2fashion, “Compared to total arrivals of 11,502,408 cotton bales of 170 kg each during 2010-11 season up to March 1, 2011, a total of 14,378,962 bales have arrived in market this season up to March 1, 2012. Thus, there has been an increase of 2,876,534 bales or 25.01 percent over the previous season.”

Informing about the number of cotton bales pressed by various ginneries across Pakistan, he says, “Up to March 1, 2012, this season, 14,301,516 bales were pressed at various ginneries. In comparison, 11,467,821 bales were pressed during the same period in 2010-11 season. Thus, 2,833,695 bales or 24.71 percent more bales have been pressed this season.”

Talking about cotton exports, he says, “The exports have boomed 77.89 percent this season. Pakistan exported 920,706 bales up to March 1 this season, against exports of 517,567 bales registered during the same period last season. Thus, 403,139 more bales have been exported this season.”

“The textile mills in Pakistan have consumed only 17.68 percent or 1,871,840 more bales this season compared to previous season. Up to March 1, 2012, textile mills in Pakistan purchased 12,462,112 cotton bales, against their purchase of 10,590,272 bales during the same period in 2010-11 season,” he mentions.


http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=109064

March 16, 2012 at 6:08 PM  
Blogger Riaz Haq said...

Here's an ET report on record high remittances from Pakistani diaspora:

With an impressive 17.7% annual growth, remittances sent home by overseas Pakistanis surged to a record high and crossed the psychological mark of $13 billion in the previous fiscal year 2011-12, the State Bank of Pakistan (SBP) announced on Tuesday.

Continuous growth in remittances is being billed as a lifeline for Pakistan’s economy, especially when energy shortages and high inflation have hurt gross domestic product (GDP) growth.

“Remittances have been playing a key role in the country’s economic performance,” said Muzammil Aslam, Managing Director of Emerging Economics Consultancy.

“One can safely say that the continuous rise in remittances in the last few years has saved Pakistan from serious economic problems including default on debt repayments.”

Aslam suggested that the government can further increase the flow of remittances if it reduces the difference between interbank and open market exchange rates for the US dollar from the present one rupee to 10 to 15 paisa. “This will encourage overseas workers to send more and more dollars through banking channels instead of illegal means.”

Invest Capital Markets analyst Khurram Schehzad commented that the continuous rise in remittances is significantly positive for the country as the money supported the economy in different forms. Overseas Pakistani workers remitted a record amount of $13.186 billion in the last fiscal year ended June 30, 2012, compared with $11.201 billion received a year earlier, the SBP said.

Except for September ($890.42 million) and November ($924.92 million), Pakistanis remitted more than $1 billion in each of the remaining 10 months.

Monthly average of remittances rose 17.73% to $1.099 billion compared with $933.41 million a year earlier.

In June overseas Pakistanis sent home $1.117 billion compared to $1.104 billion received in the same month of 2010-11.

In the same month, remittances from Saudi Arabia, UAE, USA, UK, GCC countries and EU countries amounted to $333.68 million, $219.14 million, $206.60 million, $128.12 million, $126.72 million and $29.24 million respectively. In comparison, remittances from these countries were $291.55 million, $270.04 million, $204.64 million, $121.35 million, $106.20 million and $33.83 million respectively in June 2011.

Analysts believe that the SBP’s initiative for facilitation of remittances, called the Pakistan Remittance Initiative (PRI), has significantly contributed to the growth of remittances.

Since its inception in April 2009, PRI has taken a number of steps to enhance the flow of remittances through legal channels. These include preparation of strategies on remittances, taking all necessary steps to implement the overall strategy, playing an advisory role for the financial sector in terms of preparing a business case, relationship building with overseas correspondents, creating separate and efficient remittance payment highways and becoming a national focal point for overseas Pakistanis through a round-the-clock call centre.


http://tribune.com.pk/story/406343/remittances-surge-to-record-high/

July 10, 2012 at 10:11 PM  

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